We have given a works contract to construct a factory shed, our total cost of contract is Rs. 26,00,00,000 for that we had paid Rs.5,00,00,000/- towards advance and as per agreement 30 % of the total contract amount has to pay to the contractor i.e.7,80,00,000 the contractor has raised a bill like this release of progress amount i.e 30% of the total contract = 7,80,00,000.00 He added 4%as Compositiontax= 31,20,000.00 total = 8,11,20,000.00 less advance received = 5,00,00,000.00 total = 3,11,20,000.00 again he added work contract service tax as 4% on 2,80,00,000 lakhs
i.e 11,20,000.00 and educ cess 2% 22,400.00 and sh cess 1% 11,200.00
total he billed 3,22,73,600.00
is this correct as we have to pay seperate composition tax @4% and work contract service tax @4%
CAclubindia
